Blackberry founder who oversaw company’s demise now wants to buy it

BlackBerry founder Mike Lazaridis, who built the smartphone maker into one of the world's premier technology companies before overseeing its demise and losing his job as CEO, is now seeking to become its owner.

Lazaridis submitted a filing to the US Securities and Exchange Commission declaring that he and fellow BlackBerry co-founder Douglas Fregin are exploring an acquisition of BlackBerry. Both remain shareholders, owning 8 percent of the company, and "are considering all available options with respect to their holdings of the shares, including, without limitation, a potential acquisition of all the outstanding Shares of the Issuer that they do not currently own, either by themselves or with other interested investors" the SEC filing says. Lazaridis and Fregin hired Goldman Sachs and Centerview Partners to help them evaluate their options.

Fregin was vice president of operations at BlackBerry before leaving the company in 2007.

With BlackBerry having decisively lost the smartphone market to Apple's iPhone and Google's Android, the company struck a deal to go private by selling itself to a consortium led by Fairfax Financial Holdings Limited for $4.7 billion. The deal was announced on September 23 and allows a six-week due diligence period in which BlackBerry can find a different buyer.

But that buyout is seemingly in trouble. "BlackBerry is more open to a breakup of the company amid concerns that Fairfax Financial Holdings Ltd. may be unable to line up funding or partners for a $4.7 billion buyout," Bloomberg reported earlier today. "A breakup would let parties bid for BlackBerry’s most valuable pieces, such as its patents or enterprise network."

BlackBerry's market capitalization was $83 billion in mid-2008 but has fallen to just $4.22 billion. Lazaridis' time as CEO came to an end in January 2012, but he continued holding influence as a member of its board of directors. In a board meeting late last year, Lazaridis argued against BlackBerry betting its future on touchscreen phones. An extensive report on BlackBerry's fall in the Globe and Mail describes the scene:

The speaker was none other than Michael Lazaridis, the genius behind the BlackBerry, the company’s co-founder and its former co-CEO. Minutes earlier, he said, he had spoken with [current CEO Thorsten] Heins’ newest executive recruits, chief marketing officer Frank Boulben and chief operating officer Kristian Tear.

In the board meeting, Mr. Lazaridis pointed to a BlackBerry with a keyboard. “I get this,” he said. “It’s clearly differentiated.” Then he pointed to a touchscreen phone. “I don’t get this.”

Lazaridis left the BlackBerry board earlier this year. As owner, he would likely seek to return the company to its business roots.

Any return to success seems unlikely today, though. While BlackBerry's enterprise management tools remain strong—and it has extended those to rival platforms—the business market has shifted toward devices chosen by consumers rather than their employers. iOS, Android, and Windows Phone all work well within corporate environments today. More than anything, BlackBerry needs devices that people want to buy in large numbers. There's nothing in Lazaridis' performance in recent years to suggest he's the right person to lead that effort.

This is like Captain Hazelwood asking to take the helm of the Exxon Valdez again, having just crashed it into a reef, spilling oil everywhere.

I do have to wonder what kind of ego allows someone to tank a company with that degree of epicness, and then suggest that he should take control again. Unless his strategy is "do the opposite of everything I tried to do last time".

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

This needs to be promoted. The article puts the quote way of context here. If anything Lazardis's comment makes me think he is exactly the man to lead the company back to success.

I can't imagine what could possibly motivate him to buy back in, unless it's just delusions of Jobs-like grandeur and visions of him turning everything around. If he wants to waste his money though, that's his problem. He hulled the ship so he might as well ride it down.

Lazardis gets one of the reasons the Z10 failed. That doesn't mean he has a clue how to save the company, only that, left entirely to his own devices, he wouldn't have failed in that specific way. BB needed to do something other than the same ol' same ol'.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

This needs to be promoted. The article puts the quote way of context here. If anything Lazardis's comment makes me think he is exactly the man to lead the company back to success.

Well, either he's misunderstood or even more of an idiot than anyone thought. I reserve judgement on the matter but have wondered how, if folks such as you and granroth seem to feel, he just can't communicate what he means, he has any business as a company's leader. Communication skills are pretty much required there, IMO.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

This needs to be promoted. The article puts the quote way of context here. If anything Lazardis's comment makes me think he is exactly the man to lead the company back to success.

Well, either he's misunderstood or even more of an idiot than anyone thought. I reserve judgement on the matter but have wondered how, if folks such as you and granroth seem to feel, he just can't communicate what he means, he has any business as a company's leader. Communication skills are pretty much required there, IMO.

No one is saying he has poor communication skills- the real quote from the meeting actually proves this as false. They are referring to the blatantly incorrect context in which the quote was used.

Well, Laziridis was speaking at a board meeting and we have a small snippet of the conversation. I do think it was poor framing in trying to suggest he didn't understand or "get" the concept of a touchscreen smartphone. He was making a good point--BlackBerry needed to be differentiated in some way to remain appealing to consumers. Now, I'm also not saying he knew the right way to do that. I think BlackBerry was outmaneuvered years ago and never had a chance after that, their shot at relevance was probably a shift to keyboard driven phones running Android software but even that ship has sailed on them now.

I think they were/are so tightly wound into their BES product and their ability to charge a special monthly fee for usage of their services (which are required to use their devices), that they didn't see a viable way to move away from their own in house OS because it would forego too much service revenue and destroy their tight integration in the enterprise. On the flipside, since the enterprise was shifting away from options like the BlackBerry and moving to just letting people use their iPhone and Androids with corporate apps installed on them BlackBerry was losing that segment as well. It's very hard to abandon a core business, but I think that's what BlackBerry needed to do to even have a shot, release keyboard driven Android phones and push BBM out with it years ago. But even that I think just gave them a shot, because it's still likely they'd have been killed by Samsung the same way Motorola mostly was before Google bought them or the way Sony/HTC/etc are doing badly against Samsung in Android handsets.

I should mention that there is a strange current here of people saying they can't believe Laziridis would dare suggest he run the company. He's not "asking" to run the company, he's considering buying it. If he buys the thing he has every right to run it.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

Why would you want to differentiate with something most consumers don't want any more? And why can't you differentiate with a touch screen phone? There is a whole world of differentiating opportunities to be found in software. And that software works best with a big screen.

If Lazardis thinks BB can only differentiate with a keyboard, than he really isn't the man for the job.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

This needs to be promoted. The article puts the quote way of context here. If anything Lazardis's comment makes me think he is exactly the man to lead the company back to success.

It's sad - there was a great article posted on Ars the other day (in the Editor's picks section, no less) that provided a really comprehensive look at everything that went wrong. From that story, Lazaridis really seemed to be in the right. This buyout would be the one thing that could salvage the company. Otherwise, I suspect the winner of the MS/Apple/Google bidding war for BBM will will get one of the few things of value the company has left.

For what it's worth: Blackberry catered to business and government users. They weren't really a consumer electronics company until the rise of the smartphone. That led to comparisons with companies like Apple and Google by people who had no idea who Blackberry was serving. Of course those comparisons were unfavourable, because the things that interest businesses and governments would bore the minds out of most consumers. This has created a very distorted view of Blackberry that focusses upon the negatives while completely ignoring its assets. It is quite possible that those assets are considerable, and could be used to rebuild a successful company. (Note, I'm saying a successful company. I'm not saying a rival to Google or Apple. That battle is already lost.)

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

This needs to be promoted. The article puts the quote way of context here. If anything Lazardis's comment makes me think he is exactly the man to lead the company back to success.

Well, either he's misunderstood or even more of an idiot than anyone thought. I reserve judgement on the matter but have wondered how, if folks such as you and granroth seem to feel, he just can't communicate what he means, he has any business as a company's leader. Communication skills are pretty much required there, IMO.

No one is saying he has poor communication skills- the real quote from the meeting actually proves this as false. They are referring to the blatantly incorrect context in which the quote was used.

Ah, gotcha. This is something I don't follow closely but that makes more sense. Thanks for clarifying. This could totally make sense inasmuch as stuff taken out of context and then reported widely can make anyone seem like an idiot.

I guess I'll have to dig into the original material, if it ever becomes that important to me. I doubt it will, though. It's just something i was missing on one side's commentary is all.

Well, Laziridis was speaking at a board meeting and we have a small snippet of the conversation. I do think it was poor framing in trying to suggest he didn't understand or "get" the concept of a touchscreen smartphone. He was making a good point--BlackBerry needed to be differentiated in some way to remain appealing to consumers. Now, I'm also not saying he knew the right way to do that. I think BlackBerry was outmaneuvered years ago and never had a chance after that, their shot at relevance was probably a shift to keyboard driven phones running Android software but even that ship has sailed on them now.

I fundamentally disagree. I hate keyboard phones for one reason: their keyboard either cannibalizes screen real estate or about doubles the thickness of the phone. That reduces the primary advantage a smart phone has over a tablet: size and portability. You've got to remember that when Blackberry ascended to smartphone primacy, it was the only way to quickly and easily interact with email. There was no other product on the market that allowed you to respond to emails in seconds, no matter where you were. To give you an example: in a previous consulting life, I had just returned from a flight, and was standing at the shuttle pick-up area. Blackberry buzzes, I pull it out, see that my boss is asking for volunteers for a trip to Korea, reply "Pick me!", send it off, and, because I am the first one to respond, get the assignment. There was no other device on the market that allowed me to do that. Not one.

That was the market differentiator. Not the fact that it had a best-in-class physical keyboard.

Quote:

It's very hard to abandon a core business, but I think that's what BlackBerry needed to do to even have a shot, release keyboard driven Android phones and push BBM out with it years ago. But even that I think just gave them a shot, because it's still likely they'd have been killed by Samsung the same way Motorola mostly was before Google bought them or the way Sony/HTC/etc are doing badly against Samsung in Android handsets.

You're still missing the point: physical keyboards on smart phones are a tiny niche. At that point, Blackberry might as well turn to Kickstarter for funding. Not only do people vastly prefer phones with virtual keyboards, but now there are all kinds of tablet sizes with physical keyboard attachments that fill up the space between smartphone content-consumer and laptop content-creator. There is even less of a need for a smartphone with a physical keyboard than 3 years ago; never mind 6 years ago.

Quote:

I should mention that there is a strange current here of people saying they can't believe Laziridis would dare suggest he run the company. He's not "asking" to run the company, he's considering buying it. If he buys the thing he has every right to run it.

The problem that people have with Laziridis isn't that he doesn't have the legal right to run it. It's that he still is displaying a fundamental misunderstanding of why Blackberry failed and what would bring it back. Far be it from me to say what he should do with his money, but I'm just shocked that someone who supposedly led RIM from small start-up to global juggernaut could be so woefully ignorant of why he was successful. Then again, it neatly explains why RIM failed so badly, and reinforces my belief that the vast majority of founders, executives and presidents have no special insight or skill when it comes to business.

You're still missing the point: physical keyboards on smart phones are a tiny niche.

I really disagree here. I have many clients who still use old flip phones because they do not want a touch-only interface. I have a number of others who still wish they could get a decent one with a hardware keyboard but have a touch-only because they require a smartphone in some capacity. I think the tiny niche idea is fatally flawed and a self-perpetuating myth because, of course, there's only a small number of them. Well, there's only a small number because the original ones sucked so badly. I am sure that if someone made a half-way decent one it'd sell quite well, albeit perhaps not as well as the iPhone.

Well, Laziridis was speaking at a board meeting and we have a small snippet of the conversation. I do think it was poor framing in trying to suggest he didn't understand or "get" the concept of a touchscreen smartphone. He was making a good point--BlackBerry needed to be differentiated in some way to remain appealing to consumers. Now, I'm also not saying he knew the right way to do that. I think BlackBerry was outmaneuvered years ago and never had a chance after that, their shot at relevance was probably a shift to keyboard driven phones running Android software but even that ship has sailed on them now.

I fundamentally disagree. I hate keyboard phones for one reason: their keyboard either cannibalizes screen real estate or about doubles the thickness of the phone. That reduces the primary advantage a smart phone has over a tablet: size and portability.

I agree that a physical keyboard that reduces screen size makes no sense. My primary objection to an on-screen keyboard is the same -- it eats up screen space that should be showing me content. Phones have shrunk quite a bit, the additional thickness of a keyboard is no big deal now. I would much prefer a slider over a slab. The slider is the best of both worlds.

It does appear to be true that the slab is more popular. But third parties in this market need to be chasing the underserved segments.

As for Laziridis, they always say you should own your mistakes... I don't think this is what they meant but I suppose it's the right spirit...

You're still missing the point: physical keyboards on smart phones are a tiny niche.

I really disagree here. I have many clients who still use old flip phones because they do not want a touch-only interface. I have a number of others who still wish they could get a decent one with a hardware keyboard but have a touch-only because they require a smartphone in some capacity. I think the tiny niche idea is fatally flawed and a self-perpetuating myth because, of course, there's only a small number of them. Well, there's only a small number because the original ones sucked so badly. I am sure that if someone made a half-way decent one it'd sell quite well, albeit perhaps not as well as the iPhone.

It would be financial suicide to anyone thinking of funding they guy since he will undoubtedly sink the company into the ground and I don't think he has the money to buy it on his own. But I smell something more insidious at work (I hope I'm wrong on this but he would likely turn the company into a Patent troll if they end up going out of the phone business)

Thing is, even if BB would be successful with a physical keyboard, the competition would just come out with good physical keyboards as well. It's easy to copy.

An OS focused on enterprise productivity on the other hand, is much harder to copy, since it's the core of the system. Problem is, Android already is quite powerful in that area. And BB10 is just very very late.

You're still missing the point: physical keyboards on smart phones are a tiny niche.

I really disagree here. I have many clients who still use old flip phones because they do not want a touch-only interface. I have a number of others who still wish they could get a decent one with a hardware keyboard but have a touch-only because they require a smartphone in some capacity. I think the tiny niche idea is fatally flawed and a self-perpetuating myth because, of course, there's only a small number of them. Well, there's only a small number because the original ones sucked so badly. I am sure that if someone made a half-way decent one it'd sell quite well, albeit perhaps not as well as the iPhone.

Plenty of keyboard cases for the iPhone exist.

I didn't know they existed, and I think their marketshare - and that of the Q10 - point exactly to how small the niche for hardware keyboards is. Not only that, but it means that if someone makes a popular smartphone without a hardware keyboard, there'll be mods for it, which reduces even further the need for a smartphone with an integrated hardware keyboard.

I didn't know they existed, and I think their marketshare - and that of the Q10 - point exactly to how small the niche for hardware keyboards is. Not only that, but it means that if someone makes a popular smartphone without a hardware keyboard, there'll be mods for it, which reduces even further the need for a smartphone with an integrated hardware keyboard.

In a board meeting late last year, Lazaridis said he didn't "get" touchscreen phones

Regardless of Lazardis' actual feelings about touchscreen phones, this particular snippet is a misrepresentation of what he was actually saying in the board meeting.

I think it's pretty clear that Lazardis was referring very specifically to the Blackberry keyboard-less phones and not touchscreen phones in general. He was saying that for Blackberry to differentiate themselves from iOS and Android (and Windows Phone, I guess), they need to have something that is distinctly theirs. What is theirs is their integration of their OS with a best-in-class keyboard. If they switch to just aping the class leaders, then why buy a Blackberry phone at all?

I'm not saying he's right or wrong, btw, just that he clearly did NOT mean what was quoted above.

Why would you want to differentiate with something most consumers don't want any more? And why can't you differentiate with a touch screen phone? There is a whole world of differentiating opportunities to be found in software. And that software works best with a big screen.

If Lazardis thinks BB can only differentiate with a keyboard, than he really isn't the man for the job.

Androids with keyboards do exist by the way.

Yes, I have a g2 (Android with keyboard. ) The problem was it wasn't a BlackBerry quality keyboard.

At this point, anyone who used a z10 will admit it is the best virtual keyboard. I seriously doubt there is any future in phones with keyboards given the effectiveness of the z10.

The problem with the z10 is nobody believes the company will survive, so no developers program for it, no corporations deploy it, and hence the death spiral.

The only hope for BlackBerry is some committed deep pockets company buys it.

Incidentally, while the press likes to joke about the founders of RIM, you really should give them credit for putting the pieces together that made a really good phone like the z10, even if nobody wants to buy it. For instance, the founders were behind the QNX purchase. They are good engineers, but not marketers like Apple that can sell at best problematic gear (easily cracked displays, poor radio operation, a home button prone to fail, no SD card slot, captive battery, etc.).

The problem with BBOS 10 keyboard phones is that they operate completely differently than the os 7 phones. There's no real overlap to appeal to the OS 7 users. Anyways this guy is an engineer so out of touch with the consumer market and user experience that he shouldn't be let anywhere near blackberry.

Also I got a Z10 off eBay and the phone is really quite slick. The gestures are incredibly fun to use and the ability ti run multiple apps in the background is really useful. Its biggest weakness is the lack of apps. But the ecosystem will only come with time. Blackberry needs someone with very deep pockets and a willingness to stick it out for the long haul while courting developers and inching up market share. I think BB OS 10 can be a much more appealing 3rd competitor than windows phone, but only if it's supported.

I own blackberry stock. Until I get an email or piece of paper asking me to vote on the situation as a shareholder then all of this talk is just that... talk.

Dear God Why?

You have to buy high / sell low or something.

Anyway, I think Lazaridis read somewhere that Michael Dell came back to Dell and turned it around and then eventually bought it. I think he misses the part where Dell didn't run his company into the ground and then buy it.

A few things to keep in mind, back when BlackBerry could have shifted platforms and kept the hardware keyboard, hardware keyboards were not a niche. I believe as recently as 2010 BlackBerry was still the single largest smartphone vendor in the United States and maybe globally (I'm not sure, I know Nokia was substantial then as well.) The smartphone market has changed quite quickly, two years after the iPhone had come out incumbents like BlackBerry still had massive market share, three years later they are gone. So back then, when they were still selling millions of hardware keyboard phones that people obviously liked, I think if they could have shifted the whole device paradigm to be more user friendly and more accessible (by adopting an OS like Android) and marrying it with their hardware expertise they would have had a much better chance for success.

But I don't think it was possible, I think they were too deep in the enterprise, and they never foresaw that in a few years literally, corporate IT which used to make their companies run IE6 and Windows XP for 10+ years after replacements were on the market would let people bring their own private iPhones and Android phones and hook them in to the corporate network. BlackBerry assumed they had a high moat business because of how corporate IT works, and they were wrong. To be honest I don't know that many saw that coming, I've worked in IT long enough I thought it'd be 2020 and many corporations would still require their employees to use BlackBerry because of the myriad corporate policies. Instead, even some of the most conservative corporations now only offer iPhones for example on their corporate phone plans and have custom apps so users of Android phones can take their personal devices and integrate with the corporate computing environment.

I don't think a move to more Android-like devices with BlackBerry hardware necessarily would have saved BlackBerry, and I don't think it realistic for an entrenched and profitable company to so easily pivot. BlackBerry was in a train and it never saw a much bigger train was coming down the mountain and going to intersect with it at full speed and blow it right off the tracks. Not all businesses fail because they are badly run, but BlackBerry certainly was at points. Sometimes if your core competency is in something people don't want anymore it's not realistic that you're going to survive.